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LR 15.2 Requirements for listing

LR 15.2.1RRP

To be listed, an applicant must comply with:

  1. (1)

    LR 2 (Requirements for listing);

  2. (2)

    only the following provisions of LR 6 (Additional requirements for listing for equity securities);

    1. (a)

      LR 6.1.3 R (1)(d) and (e), if the applicant is a new applicant for the admission of sharesor securities convertible into its own shares and it has published or filed audited accounts;

    2. (b)

      LR 6.1.3 R (2);

    3. (c)

      LR 6.1.16 R toLR 6.1.24 G; and

  3. (3)

    LR 15.2.2 R to LR 15.2.13 G.

Investment activity

LR 15.2.2RRP

An applicant must invest and manage its assets in a way which is consistent with its object of spreading investment risk.

Control of investee companies

LR 15.2.3G

Although there is no restriction on a closed-ended investment fund taking a controlling stake in an investee company, to ensure a spread of investment risk a closed-ended investment fund should avoid:

  1. (1)

    cross-financing between the businesses forming part of its investment portfolio including, for example, through the provision of undertakings or security for borrowings by such businesses for the benefit of another; and

  2. (2)

    the operation of common treasury functions as between the closed-ended investment fund and investee companies.

Trading activity

LR 15.2.4R
  1. (1)

    A closed-ended investment fund and its subsidiaries must not conduct any trading activity which is significant in the context of its group as a whole.

  2. (2)

    This rule does not prevent the businesses forming part of the investment portfolio of the closed-ended investment fund from conducting trading activities themselves.

Cross-holdings

LR 15.2.5RRP
  1. (1)

    No more than 10%, in aggregate, of the value of the total assets of a closed-ended investment fund at admission may be invested in other listed closed-ended investment funds.

  2. (2)

    The restriction in (1) does not apply to investments in closed-ended investment funds which themselves have published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds.

Feeder funds

LR 15.2.6RRP

If an applicant principally invests its funds in another company or fund ("A") and A invests in a portfolio of investments, the applicant must control the investment policy of A and ensure that A complies with the requirements relating to the spread of investment risk set out in this chapter (see LR 15.2.2 R to LR 15.2.5 R).

Investment policy

LR 15.2.7RRP

An applicant must have a published investment policy that contains information about the policies which the closed-ended investment fund will follow relating to asset allocation, risk diversification, and gearing, and that includes maximum exposures.

LR 15.2.8GRP

The information in the investment policy, including quantitative information concerning the exposures mentioned in LR 15.2.7 R, should be sufficiently precise and clear as to enable an investor to:

  1. (1)

    assess the investment opportunity;

  2. (2)

    identify how the objective of risk spreading is to be achieved; and

  3. (3)

    assess the significance of any proposed change of investment policy.

Sufficient and appropriate experience of directors and investment managers

LR 15.2.9R

An applicant must ensure that, collectively, its directors and investment managers have sufficient and appropriate experience in the management of assets on a scale and type in which the applicant proposes to invest.

LR 15.2.10G
  1. (1)

    An applicant is likely to have sufficient and appropriate experience if:

    1. (a)

      its assets are or will be managed by a person or persons who have permission from the FSA or from a competent authority to manage investments; or

    2. (b)

      it can otherwise demonstrate that the persons who will have responsibility for managing its assets have appropriate experience (over at least the preceding three years) of managing a portfolio of assets which is comparable to its portfolio.

  2. (2)

    An applicant will have appropriate experience under (1)(b) if the persons within the entity responsible for managing the assets have managed a portfolio of investments that has a value of at least 50% of the funds the applicant is proposing to raise.

Independence

LR 15.2.11RRP

The board of directors or equivalent body of the applicant must be able to act independently of any investment manager appointed to manage investments of the applicant.

  1. (1)

    [to follow]

  2. (2)

    [to follow]

LR 15.2.12G

To satisfy LR 15.2.11 R a majority of the board or equivalent body of the applicant (including the Chairman) should not be:

  1. (1)

    directors, employees, partners, officers or professional advisers of or to:

    1. (a)

      an investment manager of the applicant; or

    2. (b)

      any other company in the same group as the investment manager of the applicant; or

  2. (2)

    directors, employees or professional advisers of or to other investment entities that are:

    1. (a)

      managed by the same investment manager as the investment manager to the applicant; or

    2. (b)

      managed by any other company in the same group as the investment manager to the applicant.

LR 15.2.13G

To comply with LR 15.2.11 R:

  1. (1)

    the board of the applicant should have no more than one director who is also a director, partner, employee or professional adviser of or to:

    1. (a)

      the investment manager to the applicant; or

    2. (b)

      any other company in the same group as the investment manager to the applicant; and

  2. (2)

    a director described in (1) should be subject to annual re-election by shareholders.

LR 15.2.14R

[deleted]

LR 15.2.15G

[deleted]

LR 15.2.16R

[deleted]

LR 15.2.17R

[deleted]

LR 15.2.18G

[deleted]